What can be accomplished in ½ hour?

Wellness Capital Management regularly offers a free initial consultation to spa operators, wellness practitioners, and physicians.

In ½ hour, we can learn about where you are as a business and where you want to go. We can look at your financial statements and see where you are relative to breakeven. We can discuss options and strategies with you about getting to and exceeding breakeven.

If your business is going to grow and succeed, your focus needs to be on taking care of your clientele, establishing relationships, and making sure that the experience your clientele has is second to none. You need to be involved in your community and looking for ways to get the word about this guest experience into the world around you. This is the fun that you get to enjoy if you are confident that the services and products you are selling are profitable.

Calculating Breakeven

Now there I go again, bringing up the money stuff. Please notice though, that this money stuff is a management and measurement tool. If it is in place, it is a system that allows you to do what you do well; what you are supposed to be doing and have a passion for. The money stuff is a skill, and something you should have knowledge of, but your primary strength as a business owner should not be poring over and analyzing financial statements.

In our last newsletter, we talked about pricing these services and how to determine if you have an adequate gross margin. In case you missed it, (and I know none of you did), you can review it by clicking here. Now, you need to know how many of these services and how much retail product you need to sell in order to breakeven.

If I know what my Gross Margin, Overhead Expenses, and Debt Service are, I can calculate breakeven. Breakeven equals Overhead Expenses plus Debt Service divided by Gross Margin. In the example below, $4,450 (Overhead Expenses) plus $1,800 (Debt Service) equals $6,250. $6,250 divided by 38.3% (Gross Margin) equals $16,311 (Breakeven Sales).

If I take 87% of $16,311 (Service to Retail Ratio 87:13) and divide it by what I sell an average service for ($85 in this example), I get the average number of services I need to do each month in order to breakeven.

In this example, I need to do 167 services per month to breakeven. Breakeven gets me to zero profit, but I’m in business to make a profit which means I need to do more than 167 services per month to make money. Now, I ask myself, is this feasible and realistic?

If you are having trouble viewing this spreadsheet, click here for a larger version

Please let me know if this makes sense to you. We want to hear from you. Wellness Capital Management has the experience and tools to help you move your business forward.

What we can do in ½ hour.

Now that you know what can be accomplished in ½ hour, we will be providing free consultations at the International Esthetics, Cosmetics and Spa expo in Las Vegas, April 24-26 and at the Esthetics and Spa International Trade Show in Las Vegas, June 12-14. If you plan on attending either event and would like to schedule a free consultation, please email Monte@Wellnesscapital.com to arrange a time.

If you are not attending either conference, but would still like to take advantage of a free consultation, please visit our Free Consultation Page and complete the form. We will be in touch soon.